‘Higher tax mop-up has 12 states in Rs 4K-cr fiscal surplus in Q1’

Source: The Hitavada Date: 06 Sep 2017 09:40:15

Business Bureau,

DRIVEN by higher tax revenues and a sharp fall in expenditure, combined revenue receipts of 12 states grew at a robust 17.6 per cent in the three months to June against 11.1 per cent a year ago, leaving them with a fiscal surplus of Rs 4,080 crore.

These states have, in fact, budgeted a fiscal deficit of whopping Rs 1,14,160 crore for the current fiscal year, says a report by the domestic rating agency Icra. Also, with revenue growth outpacing revenue spending, these states showed an unaudited revenue surplus of Rs 43,430 crore in Q1 as against a combined revenue deficit of Rs 11,890 crore as budgeted for the year.

“Given the steep contraction in capital spending, these 12 states showed an aggregate fiscal surplus of Rs 4,080 crore, which is in sharp contrast to a combined fiscal deficit of Rs 1,14,160 crore budgeted for the year,” says Icra Chief Economist Aditi Nayar in a note. While tax revenues rose 17.1 per cent, almost double of 9.6 per cent in the June quarter, non-tax revenues rose 19.5 per cent against 17.3 per cent a year ago, taking the overall revenue receipts growth to a high of 17.6 per cent.

Tax revenue and non-tax revenue account for around 78 per cent and 22 per cent, respectively of incremental revenue during the reporting three months and their tax revenue alone expanded by a healthy 16.5 per cent.

The agency said the numbers are only of 12 states-- Chhattisgarh, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Punjab, Rajasthan, Telangana, Uttar Pradesh, Uttarakhand and Maharashtra -- because unaudited numbers are available only from them, she says.On the contrary, their combined revenue expenditure declined to 10.3 per cent from 15.9 per cent, but revenue spending stood at 17.3 per cent of the budget 2018 estimates, nearly in line with the trend last year.

Again, their capital outlay contracted by a whopping 19.3 per cent as against a whopping 51.9 per cent increase a year ago, which was partly due to the late presentation of the 2018 budget following the assembly polls in Punjab and UP.

Excluding Uttar Pradesh and Punjab, capex of other 10 states plunged to 6.2 per cent from 45.9 per cent.